The IRS Dirty Dozen 2015, #6: Inflated Refund Claims

Spc. Jeremy Roberson, a 27 year-old soldier and recipient of the Army Achievement Medal, recently confessed to stealing from the IRS. Roberson ran an off-post side business to his regular work at the 10th Combat Support Hospital in Fort Carson, Colorado. That side business was preparing income tax returns and siphoning over $22,000 in tax refunds through his account at the Navy Federal Credit Union.

Roberson is facing felony charges for theft and computer fraud. 

The refund “snare”

We mentioned in post #4 of this series (on unscrupulous income tax preparers) that the offer of a high tax refund is a red sign for a tax scam. Watch out for fly-by-night tax preparers operating out of temporary store fronts, or who distribute flyers and use other advertisements guaranteeing large refunds. 

Scam artists who utilize snares such as a large tax refund are particularly gifted at victimizing the following groups of people:

  • Non-English speakers
  • Low-income individuals
  • The elderly
  • Members of church groups

These scammers talk to their victims about getting education credits, the Earned Income Tax Credit (EITC), the American Opportunity Tax Credit, Social Security benefits and other credits that they may or may not be entitled to. Note that many of their victims don’t even have a filing requirement!

Many victims don’t even know that a refund was paid in their name, or the full extent of it.  For example, Spc. Roberson was not caught until one of his clients applied for a student loan and saw that the refund in their tax records was much higher than what was actually received by them.  Other victims have lost their federal benefits after false claims were filed in their names.

Warning signs

Victims and investigators report that scammers typically:

  • Don’t provide a copy of the tax return they prepared
  • Provide the taxpayer with a version of their return that is different than the one actually filed
  • Put their own bank account information on the return, instead of the taxpayer’s
  • Pay the refund to the taxpayer in person at the time of their meeting

Select an honest tax preparer

Keep in mind that you are ultimately responsible for everything filed in your name and you can be penalized even if you were not the one who prepared your tax return.  Heed the advice of the IRS and be cautious with your choice of tax preparer. The tax preparers at Moskowitz, LLP are skilled at assuring that you receive every advantage and incentive available, within the bounds of the law! 

#7 on the IRS “Dirty Dozen” list of tax scams is Fake Charities-we’ll describe these in our next blog post in this series.

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